Sajid Javid will travel to south Wales on Friday to promise steelworkers that the government will use all “ministerial, official and diplomatic levers” to help save their jobs, including actively seeking out buyers for Tata Steel’s British assets.
Arriving three days after the crisis broke, the business secretary will attempt to reassure 4,000 employees at the Port Talbot plant, despite a warning by David Cameron that the global collapse in the price of steel and massive overcapacity meant there was “no guarantee of success”.
It is understood that senior Whitehall officials have contacted Liberty House, a steels and metals group with an annual turnover of close to £5bn, which is in the process of buying sites in Scotland. Private equity companies, which would be likely to undertake radical cost-cutting steps, are also being approached.
Javid said he would meet workers, managers, unions, MPs and members of the Welsh government, and promised to do what he could to secure the long-term future of the company and steel industry. “Whilst we can’t change the status of the global steel market, we can and are playing a positive role in securing a sustainable future,” he added.
A source within Tata confirmed that the government was leading the efforts to find interested parties, but revealed that one option under consideration was a sale of “different portfolios”, which would mean breaking the company up. However, sources inside Tata Steel said the company, which is losing £1m a day on its UK operations, had failed to find a buyer over the past 18 months.
Tata Steel has appointed PwC to advise it on the restructuring of its UK business, but even though the company is willing to release its assets for “nothing”, investors could be put off by potential liabilities. The company – essentially the former British Steel and the UK assets of Corus – may also need a pension fund top-up of £2bn.
Source: The Guardian